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CIOs are struggling to make their digital strategies effective may have more success if they focus on the customer and work with a Chief Digital Officer, at least according to the 2018 edition of the Harvey Nash and KPMG CIO Survey.

The global IT leadership study revealed that 78% of CIOs believe their digital strategy is only moderately effective or worse, and that the number of organisations with an enterprise-wide digital strategy is down from last year to 32%.

Those who are finding success tend to base their strategies on customer revenue growth rather than inward-facing activities, as Harvey Nash Group CEO Albert Ellis told CIO UK.

"Now it's all about generating revenues and using technology to simulate additional customer transaction," he explained. "It's something that we've seen in the survey in the last three or four years."

The prospects for their digital strategies are often enhanced when they have an acting or dedicated Chief Digital Officer to help them leverage customer data. Organisations with a CDO are more than twice as likely to have a clear and pervasive digital strategy, the research claimed.

Growing budgets and headcounts

Concerns over the digital struggles will be somewhat allayed by growing budgets. IT investment is growing at the highest level since Harvey Nash began tracking the data, and half expect their budgets (49%) and IT headcount (47%) to increase.

A third of CIOs reported a major cyber attack in the last two years, and 84% of them expect their cybersecurity budgets to increase, in line with figures reported in the 2018 CIO 100.

"A lot of the focus has moved on to the detect, respond and recover elements," said David Ferbrache, Technical Director at KPMG and a former Head of Cyber and Space for the Ministry of Defence. "We're seeing a lot more buildout now of what are the worst case cyber scenarios."

Improving business processes, delivering stable IT and increasing operational efficiencies are the top priorities for CIOs, but improving cybersecurity has grown as a concern more than any other issue, followed by managing operational risk and compliance and then improving processes.

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The arrival of GDPR, an increase in commoditised organised cyber crime and a growing list of headline-grabbing data breaches have made data privacy and cyber crime central concerns, and many organisations are addressing the two issues together.

"It makes a lot of sense to bring the two together, but the risk in my mind sometimes is stovepiping," said Ferbrache. "The 25th of May has come, and that's been very much a focus in terms of GDPR compliance programmes but it hasn't really tackled those longer-term issues around structuring, protecting and managing personal data properly."

Influence on the board

There are now 9% fewer CIOs on the executive board than there were in last year's Harvey Nash survey, and fewer IT leaders report CIO influence is growing, but that doesn't necessarily reflect a shrinking CIOs influence, as their increased spending and CEO reporting lines suggest.

"They are being brought into the strategy discussions and being asked by the board to have input and to lead some of those discussions and that's, of course, creating more spend as they're hiring people to help them do that," said Ellis.

Their influence helps explain why CIOs are by and large a happy group, and 78% of them said they were quite or very fulfilled in their jobs, but 13% less says they "very fulfilled" this year.

They would likely be happier if they could plug the skills gap that 65% of them say is holding their organisations back. A third of them plan to use automation to remove the need for additional headcount and 46% use outsourcing to access skills. However, far fewer of them plan to outsource in future, and increasingly view it as a skills enhancer rather than as a cost saver.

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One of the ways in which they could attract more talent is through diversity initiatives, but these remain largely neglected. Only 29% of IT leaders said that inclusion and diversity in their technology team is very important to achieving business and technology objectives, while a quarter said it matters only a little or not at all.

"Research has repeatedly shown that diverse teams create better business outcome," said Lisa Heneghan, Global Head of Technology, Management Consulting at KPMG. The IT industry needs to step up to the diversity agenda."